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To: Box-By-The-Riviera™ who wrote (344920)	10/4/2007 1:51:01 PM
From: maceng2	Respond to of 436258

AG said something different about the UK property market in mid Sept. lse.co.uk Greenspan warns on UK housing market, inflation UPDATE 17-SEP-2007 08:03 (adds detail on Greenspan's inflation outlook) LONDON (Thomson Financial) - Alan Greenspan, the former head of the US Federal Reserve has warned of a possible downturn in UK house prices amid rising interest rates and a global credit crunch, the Daily Telegraph reported. 'There are going to be some difficulties,' Greenspan told the Telegraph in an interview. 'Can (the boom) last? No. You're already beginning to see the mortgage rates are moving; a lot of the two-year fixes are going beginning to unwind. It's going to turn, it's got to turn.' Greenspan also warned that Britain is more vulnerable to the effects of the credit crunch than the US. 'In Britain, the housing (market) hasn't turned yet, and the consumer households are more subject to interest rate changes than in the United States,' Greenspan said. On inflation, the former Federal Reserve Chairman warned that UK inflation is set to pick up dramatically over the coming years, with the possibility that interest rates may have to double in order to bring inflation under control. 'Markets are going to start turning round and inflationary pressures are going to start to build,' he told the paper. 'There's going to be more correspondence between the Chancellor and Mervyn King', he said, referring to the letter Bank of England governor King wrote to the Chancellor when inflation rose to 3.1 pct in March. Over the weekend, UK building society Nationwide, publisher of a closely-watched survey of UK property prices, warned that it expects UK house price growth of just 3 pct next year, about half its estimated level for 2007 as a whole. Analysts have said financial difficulties at UK mortgage lender Northern Rock, which was forced to seek emergency funding from the Bank of England last week, is likely to sap consumer confidence, weighing on house price growth. In a separate interview in the Financial Times, Greenspan said US house prices are likely to fall significantly, predicting that the decline 'is going to be larger than most people expect.' He added he expected prices to fall by a large single digit figure 'as a minimum,' adding that he would not be surprised if the fall was 'in double digits.' On the current credit crunch, Greenspan said it was an 'accident waiting to happen', and added that he believes the issuance of asset-backed commercial paper will never get back to the levels they once were. tf.TFN-Europe_newsdesk@thomson.com